(a) In this section:
(1) “Distributed renewable generation” means electric generation with a capacity of not more than 2,000 kilowatts provided by a renewable energy technology that is installed on a retail electric customer’s side of the meter.
(2) “Distributed renewable generation owner” means:
(A) an owner of distributed renewable generation;
(B) a retail electric customer on whose side of the meter distributed renewable generation is installed and operated, regardless of whether the customer takes ownership of the distributed renewable generation; or
(C) a person who by contract is assigned ownership rights to energy produced from distributed renewable generation located at the premises of the customer on the customer’s side of the meter.
(3) “Interconnection” means the right of a distributed renewable generation owner to physically connect distributed renewable generation to an electricity distribution system, and the technical requirements, rules, or processes for the connection.
(4) “Renewable energy technology” means any technology that relies exclusively on an energy source that is naturally regenerated over a short time and is derived from the sun directly or indirectly or from moving water or other natural movements or mechanisms of the environment. The term includes a technology that relies on energy derived from the sun directly, on wind, geothermal, hydroelectric, wave, or tidal energy, or on biomass or biomass-based waste products, including landfill gas. The term does not include a technology that relies on an energy resource derived from a fossil fuel, a waste product from a fossil fuel, or a waste product from an inorganic source.
(b) A transmission and distribution utility or electric utility shall allow interconnection if:
(1) the distributed renewable generation to be interconnected has a five-year warranty against breakdown or undue degradation; and
(2) the rated capacity of the distributed renewable generation does not exceed the transmission and distribution utility or electric utility service capacity.

(c) A customer may request interconnection by filing an application for interconnection with the transmission and distribution utility or electric utility. Procedures of a transmission and distribution utility or electric utility for the submission and processing of a customer’s application for interconnection shall be consistent with rules adopted by the commission regarding interconnection.
(d) The commission by rule shall establish safety, technical, and performance standards for distributed renewable generation that may be interconnected. In adopting the rules, the commission shall consider standards published by the Underwriters Laboratories, the National Electric Code, the National Electric Safety Code, and the Institute of Electrical and Electronics Engineers.
(e) A transmission and distribution utility, electric utility, or retail electric provider may not require a distributed renewable generation owner whose distributed renewable generation meets the standards established by rule under Subsection (d) to purchase an amount, type, or classification of liability insurance the distributed renewable generation owner would not have in the absence of the distributed renewable generation.
(f) A transmission and distribution utility or electric utility shall make available to a distributed renewable generation owner for purposes of this section metering required for services provided under this section, including separate meters that measure the load and generator output or a single meter capable of measuring in-flow and out-flow at the point of common coupling meter point. The distributed renewable generation owner must pay the differential cost of the metering unless the meters are provided at no additional cost. Except as provided by this section, § 39.107 applies to metering under this section.
(g) Repealed by Acts 2023, 88th Leg., R.S., Ch. 410 (H.B. 1500), Sec. 46(a)(5), eff. September 1, 2023.
(h) An electric utility or retail electric provider may contract with a distributed renewable generation owner so that:
(1) surplus electricity produced by distributed renewable generation is made available for sale to the transmission grid and distribution system; and
(2) the net value of that surplus electricity is credited to the distributed renewable generation owner.
[(i) reserved]
(j) For distributed renewable generation owners in areas in which customer choice has been introduced, the distributed renewable generation owner must sell the owner’s surplus electricity produced to the retail electric provider that serves the distributed renewable generation owner’s load at a value agreed to between the distributed renewable generation owner and the provider that serves the owner’s load which may include, but is not limited to, an agreed value based on the clearing price of energy at the time of day that the electricity is made available to the grid or it may be a credit applied to an account during a billing period that may be carried over to subsequent billing periods until the credit has been redeemed. The independent organization identified in § 39.151 shall develop procedures so that the amount of electricity purchased from a distributed renewable generation owner under this section is accounted for in settling the total load served by the provider that serves that owner’s load by January 1, 2009. A distributed renewable generation owner requesting net metering services for purposes of this section must have metering devices capable of providing measurements consistent with the independent organization’s settlement requirements.
(k) Neither a retail electric customer that uses distributed renewable generation nor the owner of the distributed renewable generation that the retail electric customer uses is an electric utility, power generation company, or retail electric provider for the purposes of this title and neither is required to register with or be certified by the commission if at the time distributed renewable generation is installed, the estimated annual amount of electricity to be produced by the distributed renewable generation is less than or equal to the retail electric customer’s estimated annual electricity consumption.